Health Plan Price Transparency
Health Plan Price Transparency Rules and Regulations
In an effort to promote healthcare price transparency in the United States, federal agencies have issued regulations that impose compliance mandates on health insurers and employer-sponsored group health plans. Group health plans are subject to the following:
- Transparency in Coverage Rule: A provision of the Patient Protection and Affordable Care Act, this rule aims to lower healthcare costs by requiring plans to disclose their rates and other price information for all covered billable services.
- Consolidated Appropriations Act, 2021 (CAA): The CAA imposes a variety of transparency-related requirements on group health plans, such as no gag clauses, continuity of care, provider directory consumer protections, and the Prescription Drug Data Collection (RxDC) submission requirement.
Additionally, Executive Order 14221 (Making America Healthy Again by Empowering Patients with Clear, Accurate, and Actionable Healthcare Pricing Information) directs federal agencies to issue new rules for improved hospital and health plan price transparency. This may include implementing transparency for prescription drug prices and other regulations aimed at improving the readability, comparability, and accuracy of public price information.
As new guidance emerges, healthcare price transparency efforts are expected to become more impactful and beneficial for employers.
What are the Transparency Requirements for Group Health Plans?
While fully-insured plans can assign responsibility to insurers, self-insured group health plans are directly responsible for compliance and face significant penalties for failures.
Group health plans are required to:
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Publish Machine-Readable Files (MRFs)
Plans must post MRFs on a public website disclosing in-network negotiated rates and out-of-network allowed amounts. Plans must continue to update the MRFs every month to ensure the files remain accurate.
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Submit Information About Prescription Drugs and Healthcare Spending
As a part of RxDC, multiple data files must be submitted annually by plans to the Centers for Medicare & Medicaid Services, including one file with premium/premium equivalent data, one file with medical spending by category and six files with various prescription drug data elements
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Comply With Other Transparency Provisions
Additional transparency requirements, including an online price comparison tool, will continue to roll out in the coming years.
Emergence of Price Transparency Data
Since machine readable files (MRFs) detailing in-network negotiated rates were publicly posted by hospitals in 2021 and health plans in 2022, there has been significant market activity and increased usage over time. Many providers and payers are actively using this data in price negotiation, while employers may leverage it to evaluate their health plans’ negotiated rates.
However, the vast and complex nature of MRFs is a barrier for employers lacking the necessary technology or analytical expertise to extract meaningful insights. This is a challenge for plan sponsors who have a fiduciary responsibility to leverage this data in ongoing network evaluation processes.
How Aon Can Help
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Annual RxDC Submission Support
Aon provides overall project management and oversight for the annual RxDC submission. We collaborate with an employers’ current and termed vendors to ensure the timely and accurate submission of required reports.
- Overall Project Management: We provide oversight of the annual RxDC submission with all applicable current and termed vendors to facilitate and document the timely submission of required reports.
- Preparation and Submission: When applicable, Aon experts will populate and submit your premium and life years data file (D1) and plan information data file (P2) and the appropriate narrative responses.
- Sample Contract Language: We provide sample contract language for your legal counsel to use with your medical third-party administrator (TPA) and pharmacy benefit manager.
- Additional Support and Guidance: In more complex plan structure situations, Aon will deliver you additional support and guidance through an expert team.
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Health Price Transparency Analysis
Aon’s Price Transparency Analysis offers organizations clear visibility into healthcare pricing by distilling the massive raw data from MRFs into a consumable and actionable format. Our solution enables employers to make well-informed plan decisions for their employees and dependents.
- Proprietary Data Collection and Processing: Aon collects both Hospital and Payer MRFs and then utilizes a proprietary data cleaning and validation process to improve the accuracy of pricing information. Our team combines deep subject matter expertise with commercial data from over 50 million lives to convert this information into meaningful plan insights.
- Informed Network and Provider Decisions: Our analysis empowers organizations to utilize this data to comparatively benchmark across markets, procedures and hospitals. This allows them to make the most informed decision when selecting a network that best meets the needs of their population.
- Process Support and Documentation: We provide detailed documentation, enabling employers to demonstrate prudent consideration of service providers by utilizing all relevant data available to make spending decisions.
